The Cash for Clunkers program has received an enormous amount of publicity both good and bad but how can the American people stand by quietly and be deceived into believing that this program was a success. If you read my previous post on my feelings of it being an absolute disaster then you know where I stand. However I am glad to see that there are some numbers being crunched that reinforce my opinions.
If any company (not blessed by the good grace of subsidizing) was run the way that Detroit auto divisions are they would cease to exist. The direction the US Govt. looks to be headed with the domestic auto sector makes me shake in my boots and Heaven help us when they move on to the next socialist agenda item. Ralph Schoeder of the AAE Group sent out a very good summary of quick and simple math calculations based on the official C4C numbers released. If you were responsible for making a company decision to spend 750% more dollars in charitable contributions than sales would you still have your job? Here is what Ralph had to say.
“Are these numbers correct?
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles CLUNKED – so that’s 224 million gallons / year.
That equates to 5.33 million barrels of oil.
5.33 million barrels of oil is about ¼ of one day’s US consumption.
And, 5.33 million barrels of oil costs about $400 million dollars at $75/bbl.
So, we all contributed to spending $3+ billion to save $400 million.
If these numbers are close, what economic strategy was really being employed by our government?
I have friends who own dealerships and they stated the “program” provided a needed injection of new business, given the alternative of the past months.
Not all of them have been paid (yet).
However, is this sound business strategy or simply throwing money at a problem, in the hopes it will provide the solution.
Look out public health care…”
Excerpt from Ralph Schroeder, President - AAE Group
Keep it in boost,